Africa Regional Integration Report 2016

Last month, the inaugural edition of the Africa Regional Integration Index was released. The index, which is the “product of a strong collaboration on the part of the African Union Commission (AUC), the African Development Bank (AfDB) and the [UN’s] Economic Commission for Africa (ECA),” is made up of several broad dimensions of integration and cross-border interaction, such as regional infrastructure, trade integration, financial and macroeconomic integration, productive integration, and the free movement of people. Sixteen specific indicators, which cut across the five dimensions, are utilized to calculate the overall index.

Generally, data and trends about integration across Africa have been scarce and difficult to explore. Importantly, the Index will help to fill the gap by helping to increase awareness, knowledge, and understanding about regional integration and interaction in Africa. Moreover, the Index will help in identifying challenges, raising potential solutions, and encouraging greater policy reforms. Ultimately, the Index should play a positive role in promoting progress, development, and improved living standards for Africans.

Countries covered by the 2016 report are member countries from the eight Regional Economic Communities (RECs) recognized by the African Union (AU): the Community of Sahel–Saharan States (CEN-SAD), the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD), the Southern African Development Community (SADC), and the Arab Maghreb Union (UMA).

Results of the report reveal that each REC, and each country, score higher than average on at least one priority area of integration. However, although the results demonstrate progress, average integration scores stand at below half of the scale. Additionally, findings show that the highest average scores are on trade integration, which has been a longstanding priority across the regions, while the lowest average regional scores are on financial and macroeconomic integration, where progress has been more limited to date. Additionally, average REC scores are closest together on regional infrastructure and productive integration, and furthest apart on free movement of people and financial and macroeconomic integration Of note, the EAC is the top performing REC on regional integration overall, with higher than average scores across each dimension of regional integration, except for financial and macroeconomic integration.

Results for Eritrea, which is a member of three RECs – specifically, CEN-SAD, COMESA, and IGAD – reveal both room for improvement as well as signs for encouragement. For example, scores for productive as well as financial and macroeconomic integration suggest areas to address. The former is significant in terms of creating an economic base that is more resilient to shocks and also for building a more skilled labour force that adds value to goods and services. In regard to the latter, it can promote knowledge and technology transfer, greater innovation, and more trade.

As well, Eritrea was ranked as a “high performer” (with a score that was higher than the average of all countries) in terms of trade integration, comprised of measures such as the level of customs and duties, within the CEN-SAD REC.Importantly, trade can directly and positively impact people’s livelihoods or incomes and help significantly accelerate overall development.

Ultimately, integration can be an effective, efficient tool for development, and it may serve as a foundation of Africa’s future. The Africa Regional Integration Index measures where Africa stands on regional integration and reveals important gaps and weaknesses. For Eritrea, renewed commitment and expanded focus on trade, infrastructure, production, talent mobility or capital, and integration can play a tangible role in overall competitiveness, growth, social transformation and overall development.